The Supreme Court has ruled that a bank statement alone is not proof of income.

ISLAMABAD: In a landmark ruling, the Supreme Court of Pakistan held that a bank statement alone is insufficient to verify someone’s income.

The ruling occurred during a case heard by a two-member court led by Chief Justice Yahya Afridi, with Justice Shafi Siddiqui writing the judgment.

The Supreme Court made it plain that a mere transfer of cash or financial activities in a bank account could not be considered strong proof of income.

The verdict said that sending a tax notice without clear and trustworthy proof was against the law, and tax assessments could not be based on suspicion or speculation.

The court ruled that simply because someone had money in their bank account does not imply that it was concealed income.

Before taking any action, detailed and trustworthy information related to taxable income is required.

The court deemed the tax department’s review processes unconstitutional and invalidated the reassessment effort.

The bench concluded that legal action could not be based on unconfirmed or incomplete facts.

“Every piece of information must be properly checked,” the court said, adding that any proceedings must be supported by transparent and reliable evidence.

The issue reached the Supreme Court when a person disputed the Federal Board of Revenue’s (FBR) decision to evaluate taxes based only on bank statements.

The FBR had considered the bank record as income and initiated new proceedings, which the court has now overturned.

The verdict is viewed as a significant blow to arbitrary tax investigations and a strong message that tax agents must follow the law rather than leap to conclusions.

The Supreme Court concluded the matter by noting that tax rules should not be abused and persons should not be harassed without good legal justification.